Sri Lanka (Sri Lanka)
AGREEMENT BETWEEN THE REPUBLIC OF INDONESIA AND THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME Article 1 PERSONAL SCOPE This Agreement shall apply to persons who are residents of one or both of the Contracting States. Article 2 TAXES COVERED This Agreement shall apply to taxes on income imposed on behalf of a Contracting State, irrespective of the manner in which they are levied. There shall be regarded as taxes on income all taxes imposed on total income or on elements of income, including taxes on gains from the alienation of movable or immovable property. The existing taxes to which the Agreement shall apply are: (a) in Indonesia : the income tax imposed under the Undang-undang Pajak Penghasilan 1984 (Law No. 7 of 1983) and, to the extent provided in such income tax law, the company tax imposed under the Ordonansi Pajak Perseroan 1925 (State Gazette No. 319 of 1925 as lastly amended by Law No. 8 of 1970) and, the tax imposed under the Undang-undang Pajak atas Bunga, Dividen dan Royalty 1970 (Law No. 10 of 1970) (hereinafter referred to as “Indonesian tax”); (b) in Sri Lanka : the income tax, including the income tax based on the turnover of enterprises licensed by the Greater Colombo Economic Commissionthe income tax (hereinafter referred to as “Sri Lanka tax”). The Agreement shall also apply to any identical or substantially similar taxes on income which are imposed after the date of signature of the Agreement in addition to, or in place of, those referred to in paragraph 3. The competent authorities of the Contracting States shall notify each other of any substantial changes which have been made in their respective taxation laws. Article 3 GENERAL DEFINITIONS For the purpose of this Agreement, unless the context otherwise requires : (a) (i) the term “Indonesia” comprises the territory of the Republic of Indonesia as defined in its laws and the adjacent areas over which the Republic of Indonesia has sovereign rights or jurisdiction in accordance with the provisions of the United Nations Convention on the Law of the Sea, 1982; (ii) the term “Sri Lanka” means the Democratic Socialist Republic of Sri Lanka, including any area outside the territorial sea of Sri Lanka which in accordance with international law has been or may hereafter be designated, under the laws of Sri Lanka concerning the Continental Shelf, as an area within which the rights of Sri Lanka with respect to the waters, seabed and subsoil and the natural resources may be exercised; (b) the terms “a Contracting State” and “the other Contracting State” mean Sri Lanka or Indonesia as the context requires; (c) the term “person” includes an inpidual, a company and any other body of persons; (d) the term “company” means any body corporate or any entity which is treated as a body corporate for tax purposes; (e) the terms “enterprise of a Contracting State” and “enterprise of the other Contracting State” mean respectively an enterprise carried on by a resident of a Contracting State and an enterprise carried on by a resident of the other Contracting State; (f) the term “international traffic” means any transport by a ship or aircraft operated by an enterprise of a Contracting State, except when the ship or aircraft is operated solely between places in the other Contracting State; (g) the term “nationals” means: (i) all inpiduals possessing the nationality of a Contracting State; (ii) all legal persons, partnership and association deriving status as such from the laws in force in a Contracting State; (h) the term “competent authority” means: (i) in Indonesia : the Minister of Finance or his authorized representative; (ii) in Sri Lanka : the Commissioner General of Inland Revenue. As regards the application of this Agreement by a Contracting State, any term not defined therein shall, unless the context otherwise requires, have the meaning which it has under the laws of that Contracting State relating to the taxes which are the subject of this Agreement. Article 4 RESIDENT For the purposes of this Agreement, the term “resident of a Contracting State” means any person who, under the laws of that State, is liable to tax therein by reason of his domicile, residence, place of management or any other criterion of a similar nature. Where by reason of the provisions of paragraph 1 an inpidual is a resident of both Contracting States, then his status shall be determined as follows: (a) he shall be deemed to be a resident of the State in which he has a permanent home available to him; if he has a permanent home available to him in both States, he shall be deemed to be a resident of the State with which his personal and economic relations are closer (centre of vital interests); (b) if the State in which he has his centre of vital interests cannot be determined, or if he has not a permanent home available to him in either State, he shall be deemed to be a resident of the State in which he has an habitual abode; (c) if he has an habitual abode in both States or in neither of them, the competent authorities of the Contracting States shall settle the question by mutual agreement. Where by reason of the provisions of paragraph 1 a person other than an inpidual is a resident of both Contracting States, the competent authorities of the States shall settle the question by mutual agreement. Article 5 PERMANENT ESTABLISHMENT For the purposes of this Agreement, the term “permanent establishment” means a fixed place of business through which the business of an enterprise is wholly or partly carried on. The term “permanent establishment” includes especially: (a) a place of management; (b) a branch; (c) an office; (d) a factory; (e) a workshop; (f) a mine, an oil or gas well, a quarry or any other place of extraction of natural resources; The term “permanent